What to consider when getting a mortgage at 45?
You may be able to get a mortgage at 45 depending on when you intend to retire.
Most mortgage lenders will like to see any mortgage they give end before the borrower turns 75 although other mortgage lenders will want to see the mortgage end before you retire from work.
To get a mortgage at 45 you will likely need to get a mortgage which ends within 30 years and hence ends before you turn 75.
There has been a rise in borrowers who are over 45 being turned down for mortgages.
Mortgage lenders are now paying more attention to the pension available to the borrower and their possible income after retirement.
Can you get a mortgage at 45?
Whilst you will likely be able to get a mortgage at 45 you may find that most mortgages that you may be offered may have a mortgage term which ends when your 60 which happens to be the time that most people retire from work.
You may find very few mortgage lenders may offer you a mortgage with a repayment term of more than 25 years if you want to get a mortgage at 45.
Using a mortgage broker may help you by advising you on mortgage lenders who are happy to lend to people at 45 and offer them their full product range with mortgage terms ending at 75 years old or beyond.
Most mortgage lenders also look at borrowers trying to get a mortgage at 45 with more scrutiny because at the age of 45 they assume your earning potential has likely reached its cap depending on what type of job you have.
Regardless of all of this, it is still very possible to get a mortgage at 45 and you may still be eligible for some of the home buying schemes provided by the UK government.
Some of these schemes include:
- Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
- Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
- Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
- Shared ownership- You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
- Armed forces help to buy- similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
- Rent to buy- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
- Right to buy- allows you to buy your home at a discount price.
- Preserved right to buy– same as above.
- Right to acquire- same as above.
Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich the local councils provide the Norwich home options scheme.
You may also be able to get a host of 100% loan to value mortgage at 45.
They are a certain type of mortgage known as a family springboard mortgage, they include mortgages from lenders such as the Barclays family springboard mortgage, the Lloyds lend a hand mortgage or the post office family link mortgage.
If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.
You can also contact the debt charity “Step Change” if you are in debt and need help.